The City of Smithville plans to present  the DeKalb Utility District with a proposal for a new water-purchase agreement.
While a Utility Management Review Board hearing is set for Thursday to consider the DUD's planned water treatment plant, city officials have a last-minute plan they hope will cause them to reconsider the project.
City attorney Vester Parsley, Jr. told the mayor and aldermen Monday night that J.R. Wauford, the city's engineer, has recommended that the city offer to sell water to the DUD at $2.20 per thousand gallons for the first five years, at which time the rate would increase to $2.40 per thousand for the last half of the 10-year agreement.
Under the existing contract, which expires early next year, the DUD pays $2.05 per thousand gallons.
The plan would take effect at the end of the current contract.
“We had Mr. Wauford to do a feasibility study for us to make an offer to the DUD regarding a possible solution to this problem by offering to them a contract which would say for the first five years that we could sell water to them at a rate of $2.20, and after that for an additional five years at the rate of $2.40,” Parsley told the city council.
Parsley said that while the proposed rate  is less than the city's actual cost of $2.67 per thousand gallons to produce water, he believes that it would be more beneficial for the city to reach an agreement with DUD than to lose its biggest water customer.
Parsley said more than $300,000 could be lost if the DUD stops buying water from the city.
“I realize that's a little below what the cost study of Mr. Warren said,” Parsley noted. “However, one of the factors you have to consider is that if we lose DUD, we lose roughly $300,000.
“But we can sell it to them wholesale a little cheaper because of the volume that they have,” the city attorney continued. “Mr. Wauford felt like it was better to reduce our rates to them for the next 10 years to keep them as a customer rather than lose them as a customer and have to lose probably in excess of $300,000 annually.”
The aldermen and the DUD board  would both have to approve the plan.
Parsley said the proposal would be delivered to DUD Attorney Keith Blair on Tuesday.
“We will submit that to them tomorrow. I don't know that we'll have any answer right away,” Parsley said.
The city's proposal may or may not affect the UMRB rate review hearing, depending on DUD’s response to the offer.
The meeting is set to begin at 8 a.m. tomorrow at the county complex on Congress Boulevard.
Other business will be discussed first, but the local matter is expected to be taken up around 9 a.m.
The hearing is open to members of the public, but only called witnesses will be able to speak before the review board.
The hearing is expected to last for several hours.
“It’s possible that the hearing may go into Friday,” Parsley said. “It’s expected that if we finish on Thursday it will certainly be late into the evening.”
Once all the testimony is heard, the seven-member board will decide the case in public.
An administrative law judge will direct the process.
“The procedure would be that the board would actually make a decision then and there,” Parsley shared. “It will be open. They will openly discuss the ramifications of building a new plant in front of the public.
“The public as a whole will not be allowed to speak,” Parsley continued. “The reason for that is because the administrative law judge did not want it to get into just a gripe session. We're going to be pressed for time as it is. There's about six lawyers involved and there will be several witnesses. We expect to be in testimony for six to eight hours or longer,” said Parsley.